Film industry continues losing crores with no end to producers-multiplexes fight
The producers strike due to the dispute between Bollywood and multiplexes has resulted in no major movie releases this April leading to losses on both sides.
Shah Rukh Khan and Aamir Khan at a news conference about the issue
“The industry has lost over 50 crore rupees in a month,” says producer Mukesh Bhat, the head of United Producers Distributors Forum.
The two big movie seasons in India are April, when schools and colleges break for summer and November, when its Diwali- the main festival for Hindus.
Actor Aamir Khan said, “We value the contribution of the multiplexes, but there is a need to re-examine the revenue-sharing model.”
Already the strike has taken its toll on the recession-hit industry with total losses expected to be over a billion rupees. The multiplexes too are estimated to lose 3 billion rupees by June.
“Over 250 multiplexes in the country will close rather than accept what certain Bollywood producers are proposing,” says Atul Goel, CEO Essel group which operates FUN cinemas and chairman of the Multiplex Association of India.
The strike began on April 4 and since then no announcements have been made on when it will cease..
There are four big issues contested. Firstly multiples owners retain 60% of profits and gives the remaining to Bollywood. Producers are demanding a 50-50 share in profits. Actor Shah Rukh Khan calls it “fair rights for friday nights.” Multiplexes will only agree if the movie is profitable which according to Bollywood is a ‘subjective’ matter.
Atul Goel, head of Multiplex Association of India.
The credit crunch coupled with big-budget movies like Chandni Chowk to China, Billu Barber and Delhi 6 flopping at the box office has to the industry facing heavy losses. Moneyflow has dropped and slowed down in Bollywood. Hence financing is an essential. The multiplexes are sympathetic to the issue but are demanding a better deal.
Multiplexes are accused of deducting entertainment taxes even in states where they are not imposed. Also there is an additional charge of 2-8% on service tax which goes straight to the multiplexes. Aamir Khan says, “Some people have been charging that and keeping it for themselves.” Multiplexes have denied charges saying ‘not everyone is the same’
Also another issue is irregular ticketing. “We have found that if a deal is on 100% booking, the last two seats are not sold. Multiplexes though have denied such accusation sayin all -ticketing is done online.
Multiplex have sprung up all India since the last six tears. There are 240 multiplexes and about 850 screens in India. Ernst and Young reports that around 3.7 billion cinema tickets are sold in India per year. Vishal Kapur from FUN Cinemas says, “We can only recover 4-5 lakh rupees per month We have come close to losing 40 billion last month.” With the average cost of running a multiplex 2-3 million rupees of which only a fifth of it was recovered.
Although no big budget movies were planned for the summer, beginning June many movies are in the pipeline such as Vishal Bharadhwaj’s Kaminey, Vashu Bhagnani’s Kal Kissne Dekha, Yash Raj’s New York and Vishesh Films Jashn. Bhatt says, “The industry is bleeding and we all stand united in this problem.”
